Pomona-based LMS has bought the right to make spas under the name of the popular outdoor supply company. It plans to add 90 new jobs at its plant by year's end.

About 60 spa manufacturers have closed over the last six years, and experts say sales have dropped by as much as two-thirds over the same period.

But at a time when its competitors are pulling back and trying to diversify, a Pomona company is hoping to stave off the continuing decline by gambling on a well-known name.

Hot tub manufacturer LMS Inc. has paid an undisclosed amount for the right to make free-standing spas under the name of the popular outdoor supply company Coleman.

Having survived the downturn in part by diversifying early -- adding gazebos and barbecues at a time when competitors were still making mostly spas -- LMS says it plans to add 90 jobs at its 1-million-square-foot plant by year's end to build new hot tubs. About 250 jobs over the next two years should be added if the Coleman-brand spas sell well, said Casey Loyd, LMS' president.

But LMS has no guarantee of success. The company faces a marketplace harshly tested by changing consumer tastes and the evaporation of the luxury market.

"They're pretty sure of themselves to be taking this all on," said David Wood, publisher of SpaRetailer magazine. "They're the ones taking on the risk here, not Coleman."

Sales of aboveground spas have been so poor in recent years that the big home improvement chains rarely stock them. Home Depot sells hot tubs only on its website; Lowe's doesn't carry any. Wal-Mart and Sam's Club sell spas online and in a small number of stores. Small specialty retailers are making the shift from selling mostly hot tubs to selling a variety of outdoor furnishings and supplies, Wood said.

Kathryn Gallagher, a spokeswoman for Home Depot, said the retailer moved to online-only spa sales two years ago as consumers moved away from luxury items.

With little return on an item that takes up so much floor space, retailers are reluctant to stock hot tubs in-store, said Lauren Stack, a spokeswoman for the Assn. of Pool & Spa Professionals. Selling spas takes significant effort, Stack said, and few large retailers are willing to invest in the necessary staff and training.

"When you do see hot tubs sold in stores, they're usually put on top of shelves in the back of warehouses," she said.

Small retailers tend to do better because they have trained staffers who can take a long time to make a sale, Stack said. But such stores' ranks have been thinned by the crash in demand.

The market for hot tubs isn't the only one suffering.

Consumers aren't spending money on many luxury items right now, said Craig Kennison, an analyst with Robert W. Baird & Co. And until the recession is long gone, spending on high-end goods is likely to stay low, he said.

"Luxury markets tend to be a harbinger for the broader economy," said Kennison, who specializes in the similarly slumping market for recreational vehicles. "We go into the recession much before the overall economy. The boat market, the motorcycle market, pool tables, spas, RVs -- all of these luxury markets are impacted the same."

Another problem is that when it comes to hot tubs, consumers don't really think about the brand, said Wood of SpaRetailer magazine. So the Coleman name won't necessarily spur any sales, he said.

"We ask consumers all the time, 'What brand do you buy?' " he said. "Almost 62% of people don't even know what brand of spa they own. There is virtually no brand recognition in the hot tub industry."

Coleman has had hot tub licensing agreements in the past, with only moderate success, Wood said.

The backyard and camping company has not had a spa on the market in three years -- and its last licensee went out of business before a single tub could be made, said Jason McClintock, Coleman's senior director of product and licensing.

But Coleman and its parent company, Jarden Corp., were impressed with LMS' ability to build and market its existing brand, CalSpas, at a time of turmoil, McClintock said.

Jarden executives think LMS will be more successful in building Coleman Spas than previous manufacturers, but they won't be expecting sales to take off immediately, he said.

"We certainly don't expect glorious results in the first 12 to 18 months," McClintock said. "I think by 2012 we expect it to be up and running with a lot of growth ahead."

Hayley Wolff, an analyst who covers Jarden for Rochdale Securities, said the LMS deal is part of a broader strategy by Jarden and Coleman to set up licensing arrangements with manufacturers and distributors. The company hopes to bring in $50 million a year from licensing deals.

"Licensing, if done right, is a great way to increase brand visibility," Wolff said. "You get someone to build a product with your name on it. It's almost all profit, and there's very little expenses."

Wolff said she thinks there's a good chance the Coleman name will get the LMS hot tubs into big retail chains.